TAMI tenants — long drawn to Midtown South — are flocking to the Downtown office market, pushing the average asking rent to a record $62 per square foot in May, according to a new report.
The submarket, seen as a value proposition to Midtown and Midtown South, has seen a “steady increase” in rents, the report said. Despite that uptick, average asking rents are still well below the Manhattan average asking rent of $75 per foot and some 23.5 percent below Midtown, where asking rents are in the low $80s per square foot, CBRE found.
Downtown has more than 1.2 million square feet of available space asking $50 per foot or less. There’s 4.2 million square feet available asking between $51 and $60 per foot, according to the brokerage’s report.
TAMI tenants accounted for nearly 30 percent of leasing activity in the Downtown submarket this year, according to Adam Foster, CBRE’s executive vice president. He said “smaller to mid-sized” TAMI tenants have also been drawn to the area’s relatively low prices and transit access, namely the Fulton Center station, the Commercial Observer reported.
Large tenants are also moving in, and year to date leasing topped 2.8 million square feet. In February, Spotify inked a deal for 378,000 square feet at 4 World Trade Center.
CBRE is marketing 1.7 million square feet at Silverstein Properties’ 3 World Trade Center, where asking rents start in the low $80s per square foot. Advertising firm Group M, which has 700,000 square feet, is the building’s anchor. [CO] — E.B. Solomont